Actual Bitcoin Supply Will Be Less Than 21 Million

I wrote back in July 2021 about lost Bitcoin and actual max supply. My conclusion was that the actual max supply was around 17 million at the time of that writing. I thought it would be interesting to revisit the subject, and see if we can draw any new conclusions. 

First, let's check the maybe not so famous 1BitcoinEater, a Bitcoin burn address. For whatever reasons, people have sent 13.31897113 BTC to this address since 2011. When I last checked this address over two years ago, the balance was 13.28205468 BTC. Not a huge increase, but that's satoshis going to a "dead wallet" that no one has the keys to access.

The current supply of Bitcoin is 19,459,306 which is 92.66% of the 21 million max supply cap. We will have to wait until the year 2140 to hit that ceiling. Well, we (I, the writer and you, the reader) won't be around to see it but we (humanity) hopefully will. Anyway, the next halving (a planned reduction in the mining reward) is set for approximately April 2024. That's less than nine months to go. Historically, the price of BTC has seen a rise on each halving event.

The theory goes that as Bitcoin supply becomes more limited, the price will increase as demand increases over time. That's the idea, anyway.

In actuality, about 4 million Bitcoins are in "dormant wallets," those which have made any outgoing transactions or have been inactive for years. That would put the actual circulating supply at approximately 15.5 million BTC. These wallets, however, cannot exactly be confirmed as housing lost Bitcoin. They could perhaps be in the hands of hodlers. There's simply no way to confirm or deny it.

There's also the cases of the several crypto influencers who have mysteriously died in recent years. It's possible they may have taken the keys with them, or perhaps they had securely stored them for someone else to inherit. Again, we may never know the full truth but it's possible these could be circumstances for lost Bitcoin (and a wormhole of conspiracy theories).

My conclusion in 2023 is essentially the same as in 2021: back then I estimated that 3-4 million Bitcoins are lost. Now I think that number is closer to 4 million. Please keep in mind that these numbers are based on educated guesses and speculation. Dormant wallets do come to life from time to time, which would mean that either the keys were recovered somehow, or someone finally decided to move their funds elsewhere. In both cases, Bitcoin that was once thought lost isn't actually lost. In these cases, it's most definitely lost:

Let's conclude with this infamous post from Satoshi himself:

Keep your keys secure and safe. If applicable, ensure they can be found for your next of kin.